Canadian Solar (CSIQ) Is Today's Pre-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Canadian Solar ( CSIQ) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Canadian Solar as such a stock due to the following factors:

CSIQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $209.3 million.

CSIQ traded 19,752 shares today in the pre-market hours as of 8:20 AM.

Canadian Solar Inc., together with its subsidiaries, engages in the design, development, manufacture, and sale of solar power products worldwide. The company offers solar wafers, cells, and solar module products that convert sunlight into electricity for various uses. CSIQ has a PE ratio of 62.0. Currently there are 3 analysts that rate Canadian Solar a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Canadian Solar has been 4.4 million shares per day over the past 30 days. Canadian Solar has a market cap of $2.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 2.80 and a short float of 6.1% with 0.28 days to cover. Shares are up 31.1% year-to-date as of the close of trading on Friday.

TheStreet Quant Ratings rates Canadian Solar as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:

CSIQ's very impressive revenue growth greatly exceeded the industry average of 5.3%. Since the same quarter one year prior, revenues leaped by 76.2%. Growth in the company's revenue appears to have helped boost the earnings per share.

CANADIAN SOLAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CANADIAN SOLAR INC turned its bottom line around by earning $0.56 versus -$4.52 in the prior year. This year, the market expects an improvement in earnings ($3.86 versus $0.56).

The gross profit margin for CANADIAN SOLAR INC is rather low; currently it is at 19.49%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, CSIQ's net profit margin of 4.03% is significantly lower than the industry average.

The debt-to-equity ratio is very high at 2.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CSIQ has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.